Even as consumer demand picked up in the second half of FY21, textile major Raymond expects to see a 'modest' growth for its fabric business. The company said in its annual report that the second wave has further dampened consumer sentiments and discretionary spends. With clothing becoming a non-essential item through the pandemic, and discretionary spending coming down, the company has said that demand for clothing has been impacted.

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"COVID-19 demarcated consumer products into essential and non-essential categories, which took over spending trends in the near term. Demand for clothing, which is a non-essential item, with discretionary spend thus being impacted," the company said in its annual report.

Raymond Group's chairman Gautam Singhania said in the annual report that the first quarter of FY21 was the 'darkest hour' of the fiscal. However, the company ensured liquidity and costs were prioritized in first two quarters and reworked operational efficiencies resulting in reduced working capital that helped paring debt in FY21.

"We took some tough decisions during the year that reaped results for us as we pared debt in FY 2020-21 demonstrating our resilience especially during the pandemic. Having witnessed the second wave of COVID-19 causing more devastation and its reluctance to go away soon, the key for the economy to come back on track is through accelerated pace of vaccination," Singhania said.

Once normalcy returns, Raymond expects recovery to take a mid-term time frame primarily driven by occasion and celebration-led dressing.

Raymond's branded apparel business, which comprises Raymond Ready to Wear (RRTW), Park Avenue (PA), ColorPlus (CP) and Parx, saw sales fall 71.8 percent in FY21 to Rs 457 crore from Rs 1,619 cr in FY20. Work from home, which has reduced the demand for many sections of apparels continues to remain a challenge for the business. Further, an extended End of Season Sale (EOSS) and alluring price cuts are mounting pressure on margins, the company said.

In the branded textiles business, the company said that the Made to Measure (MTM) business was impacted due to lower consumer discretionary spend and that the recovery will take a medium-term time frame. In the near term too, the company expects to see low traction in the exports market due to the pandemic. However, the upcoming wedding season and the festive season, combined with states slowly unlocking, is expected to amplify demand. Sales from the branded textiles business fell 46 percent YoY in FY21 to Rs 1,572 crore.

The retail business was also hit during the year with most stores being forced to remain shut in most part of the past 15 months. Raymond shut 198 stores non-profitable stores in FY21, while adding only 46 new stores across metros & lower tier towns mostly through franchise model. The company says there is limited visibility for short to mid-term due to unprecedented market disruptions.

"The pandemic altered the trend of witnessing the substantial footfalls in malls mainly impacting Exclusive Band Outlets for short to mid-term," the company added.

Raymond currently has 1,486 Stores of which 1,090 are outlets of The Raymond Shop, 47 Made-To-Measure outlets, including 32 converge stores.

The company also alluded to an increased digital focus through the pandemic where Raymond revamped its e-commerce platform 'myraymond.com' to strengthen its online presence. The company also launched various digital offerings like the 'Raymond Home Assist', Tailoring Subscription program, Concierge Services, virtual tours including a customisation offering 'Made to Order' on myraymond.com.

Raymond said that it has seen a double-digit growth in repeat purchases from loyalty members with 1.2 new members joining its loyalty program in FY21.

"Our focus is on lowering the product life cycle through product innovation and development closer to the seasons for better inventory management and reduced working capital; on channel mix to alleviate business partnerships through meaningful engagement; on bringing in efficiencies for improved margins and on sharpening omni-channel capabilities," Raymond said.

(Edited by : Abhishek Jha)